Understanding income statement relationships—Apple Inc. Selected data from the September 27, 2008, and September 29, 2007, consolidated balance sheets and income statements for the years then ended for Apple Inc. follow. All amounts are reported in millions.
| 2008 | 2007 |
Net Sales | $32,479 | $24,006 |
Cost of sales | 21,334 | 15,852 |
Research and development expenses | 1,109 | 782 |
Selling, general, and administrative expenses | 3,761 | 2,963 |
Operating income | ? | ? |
Other income, net | ? | 599 |
Provision for income taxes | 2,061 | ? |
Net income | $4,834 | $3,496 |
Required:
a. Calculate the amount of Apple’s gross profit for each year. Has gross profit as a percentage of sales changed significantly during the past year?
b. Calculate the amount of Apple’s operating income for each year. Has operating income as a percentage of sales changed significantly during the past year?
c. After completing parts a and b, calculate the other missing amounts for each year.
Case
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